New Delhi, April 6 – The Ministry of Mines has notified amendments to the Minerals Concession Rules aimed at increasing the exploration and production of critical minerals used in the production of electric vehicles, high-tech electronic goods, and defence equipment, according to an official statement issued on Monday.
The Minerals Concession Rules 2026, notified on March 30, provide a detailed mechanism for including contiguous areas in the mining lease and composite license of deep-seated minerals, as well as including associated minerals in the mining leases of major and minor minerals.
The amendments to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), through the MMDR Amendment Act, 2025, give impetus to the mining sector to increase the supply of minerals for industries, thereby strengthening "Atmanirbhar Bharat" (Self-Reliant India), the statement said.
The amended rules provide simple and time-bound provisions for processing applications from the holder of a mining lease (ML) or composite license (CL) of deep-seated minerals for a one-time extension of the area to include a contiguous area. In the case of an ML, the contiguous area shall not exceed 10%, and in the case of a CL, the contiguous area shall not exceed 30% of the existing area under the lease or license. If a contiguous area is added to an auctioned ML or CL, the holder must pay 10% of the auction premium on the minerals dispatched from that added area. If the lease was granted without auction, the holder must pay an additional amount equal to the royalty on the minerals dispatched from the added area.
Allowing the inclusion of contiguous areas will promote the optimal mining of deep-seated minerals, which are locked up in contiguous areas and may not be economically viable to be extracted under a separate lease or license.
The rules further provide the manner of inclusion of any other mineral, including a minor mineral, in a mining lease, and mandate that the state government must permit such inclusion within 30 days of the application. No additional amount is applicable on the inclusion of critical and strategic minerals or deep-seated minerals specified in the Seventh Schedule to the MMDR Act, in order to incentivize the production of these minerals, which are found in small quantities and are difficult to mine and process.
The Amendment also provides the manner of inclusion of major minerals in a lease granted for minor minerals, which was executed before the MMDR Amendment Act, 2025. For the grant of minor mineral leases in the future, the state governments have been mandated that ML for minor mineral (other than sand) shall only be granted after exploration of the area up to the G3 level. In case any major mineral is discovered in the area upon exploration, the state government shall auction the area as a major mineral block. This is another step towards optimal mining.
The rules were also amended pursuant to the amendment in the Act to remove the limit on the sale of minerals from captive mines. Miners can sell minerals after meeting the requirements of the end-use plant linked with the mine when the end-use plant operates at its full capacity. In case the end-use plant operates at a capacity lower than its full capacity, then the lessee may sell only the quantity equal to the quantity of mineral consumed in the end-use plant in a financial year. This will increase mineral availability in the market, including for MSMEs.
The simpler regime provided in the Amendment rules will not only promote ease of doing business in the sector but will also enable an increase in the production of critical, strategic, and deep-seated minerals. At the same time, state governments would also benefit from the additional payments and increase in production. The rules were made after extensive consultation with State Governments, Central Ministries, industry associations, and other stakeholders, the statement added.